Hurtling (and Hurting) Down the H-1B Road: Part 4 of 4

ACWIA introduced a requirement that H-1B workers and similarly situated U.S. workers be given an equal opportunity to partake of an em-ployer's benefits programs. The DOL in its Interim Final Rule included the equal-benefits obligation in the required wage. [37] One recent case, Blue Star Infotech, addressed the benefits obligation with interesting results. There, the complainant asserted that she was denied "a Bay Area cost of living allowance, a family round trip airline ticket to India, and commission incentives" valued collectively at over $25,000. The DOL administrator maintained that such incentives did not constitute "appropriate fringe benefits" but rather "contractual benefits negotiated between individual nonimmigrant H-1B workers and the employer, and are governed by state law." The DOL administrator also asserted that the DOL has no jurisdiction over state employment contracts. [38] The court rejected complainant's argument. The ALJ held that no other workers were similarly employed and that in any event the complainant was paid in excess of the prevailing wage. The court also noted that "[h]ad Blue Star's alleged failure to pay commissions brought her actual wage below the prevailing wage, this would be actionable under the H-1B regulations." Consequently, the court suggested that she take up her claim "in another forum," presumably referring to the state court.

If the car breaks down,
Pull out the wrench,
But when there's no work,
Do not bench.

The No-Benching Obligation

ACWIA and the DOL's Interim Final Rule prohibits an H-1B employer from failing to pay the required wage during non-productive periods unless nonpayment is at the voluntary request of the employee. In Novinvest and Kutty, the ALJs had little difficulty in finding a benching violation notwithstanding the assertion of a number of ultimately unsuccessful arguments, e.g., that the employees (a) did not commence employment, (b) "voluntarily" signed ex post facto requests for leave, and (c) lacked a proper medical license. In Kutty, the respondent (with no lack of chutzpah) argued unsuccessfully that the employer should not be required to pay wages since the INS should never have approved the H-1B petitions in the first instance.

You thought your wages were H-1B portable
But the judge took a look,
And found your claim insupportable.

H-1B Portability and the Required Wage Obligation

In Infinite Solutions, the complainant sought H-1B back wages for services rendered during various visits she made to respondent's offices, maintaining that she was eligible for employment and deserving of compensation under the principle of H-1B portability.[39] When the respondent filed the LCA on behalf of the complainant, she had been working at a different H-1B employer, but was terminated by that first employer. It appeared that respondent then agreed to sponsor an H-1B change-of-employer petition as "a favor" to the claimant and offered an "expected annual salary" of $65,000. The court found that the activities performed by claimant at the respondent's offices ("sending e-mails, interviewing, and taking a computer course") were aimed at finding work for complainant but were not performed as "work" on behalf of the respondent. In addition, the court accepted the testimony of the employer that, had he intended to take advantage of the H-1B portability provisions, "[h]e would have so stated in the application." In denying wages on the basis of H-1B portability, the court concluded that the "facts simply do not support the existence of, nor a common intent to create, an employment relationship at any point prior to the approval of the H-1B application." [40]

Driving with the sunroof open,
You may roast,
Just be sure that two LCAs
You correctly post.

LCA Posting Obligation

In Santiglia, the employer posted two LCAs-one in the corporate offices and the other at the worksite in a different city. While noting that the employer was not barred from posting at corporate headquarters, the ALJ ruled that the regulations require the posting of two LCAs at the physical location where the H-1B employee would be working. The court declined to impose a civil monetary penalty, however, by finding that since one LCA was posted in the correct location, "there was no substantial violation of the posting requirement." [41]

Each day your car gets older and older,
But be sure to keep and show
Your Public Access Folder.

Public Access Obligation

Santiglia also offers guidance on the employer's duty to keep and make available on request H-1B public access folders (PAFs). The case holds that an employer:

May require a person requesting an opportunity to inspect the PAF to make an appointment, and sign a log book before being given access to the PAFs;

May limit access to one box of PAFs at a time;

May refuse to allow copying or photographing of PAFs;

May omit from the PAFs the names of H-1B aliens and the "specific wage being paid a specific H-1B worker"; and

May limit inspection of the PAFs to the principal place of employment and need not provide access at the job site; but

In Kutty, however, the employer produced no PAFs whatsoever. The court entered into evidence a letter from the employer's former immigration lawyer advising Dr. Kutty of the obligation to maintain such records. Finding that this knowing failure to follow the law amounted to recklessness, the ALJ fined respondent $800 for each failure to maintain a PAF.

To drive the H-1B highway
You must concentrate,
But against an aggrieved party
Do not retaliate.

Whistle-Blowing Provisions

Two recent cases address the DOL regulatory ban on retaliation against an H-1B worker for engaging in "protected conduct" by complaining of an employer's violation of the H-1B requirements.[43] In Blue Star Infotech, the ALJ refused to find an employer to have violated the prohibition against retaliation because the complainant's claims involved alleged discrimination in violation of the regulations of the Equal Employment Opportunity Commission and the California Department of Fair Employment and Housing. As the court ruled, "such complaints do not fall within the purview of [INA §] 212(n)" or the corresponding regulations. The court also held that no retaliation was proven merely because complainant expressed dissatisfaction with a new incentive policy, and the employer suggested that she "go to the Dept. of Labor with [her] question."

In Kutty, however, the ALJ found employer retaliation when Dr. Kutty fired H-1B workers after their lawyer complained to Dr. Kutty and the DOL that the H-1B workers' salaries had been improperly reduced. The court found that retaliation was a contributing factor leading to the firings even though the employer's inability to afford the salaries also played a role. Thus, applying a "mixed-motive" analysis, the ALJ concluded that unlawful retaliation had occurred and ordered payment of $36,000 in fines.

Ignore H-1B road rules,
And for a time you may sail,
But disregard corporate formalities,
And the judge will "pierce your corporate veil."

Personal Liability for H-1B Back Wages and Fines

In Kutty, the ALJ assessed almost $1 million in back wages and civil fines against various corporate entities that had served as H-1B employers for several doctors. Because the corporate employers were defunct and virtually penniless, however, the court examined whether payment for wages owed and fines arising from numerous H-1B violations could be assessed against the companies' sole shareholder, Dr. Kutty. Applying Tennessee law, the court adopted a traditional analysis to pierce the corporate veil and hold Dr. Kutty personally responsible for paying back wages and fines. The ALJ found that: (a) the corporations were undercapitalized; (b) financial transactions were not properly recorded; (c) Dr. Kutty exercised sole control and held sole ownership of the entities; (d) assets in the companies were treated as interchangeable with personal assets; and (e) dealings were not at arms length. Although holding Dr. Kutty personally liable, the ALJ took pains, however, to note: "In the ordinary course of events, the individual signing the LCA and H-1B petitions on behalf of a corporation would not be considered the [H-1B] employer in his or her indi-vidual capacity."

END OF THE H-1B ROAD?

Willie Nelson, who turned 70 years young earlier this year, knows first-hand about run-ins with the federal government (having crossed swords and lost with the Internal Revenue Service in a celebrated tax case of the late 1980s). Willie surely knows about the hardscrabble life. The nation's many H-1B stakeholders would be well advised to consider Willie's timeless wisdom. There's no end to the H-1B road as long as this country continues to need bright professionals to fulfill the demand for foreign workers and fund the Boomers' Social Security retirement pensions.[44] So as Willie might sing if he knew about the H-1B visa:

I can't wait to get on the [H-1B] road again.
On the [H-1B] road again,
Goin' places that I've never been.
Seein' things that I may never see again.[45]

Next week: Hurtling (and Hurting) Down the H-1B Road: All Parts Compiled

This article is slightly modified from the versions which appeared in 8 Bender's Immigr. Bull. 1022 (June 15, 2003) and as part of the conference materials at the 2003 annual conference of the American Immigration Lawyers Association. Copyright retained by Angelo Paparelli.

About The Author

Angelo A. Paparelli, certified as a Specialist in Immigration and Nationality Law by the State Bar of California, has been practicing business-sponsored immigration law for 25 years. He is a nationally recognized speaker, published author and leading expert on cutting-edge, business-related immigration issues-including the immigration consequences of mergers, acquisitions, reorganizations and other business changes, consular visa practice, audits of employers' compliance with immigration regulations, and work visas for executives and professionals. From 1991 to 1996, Mr. Paparelli served as co-Chairman of the Immigration and Nationality Law Committee of the ABA's Section on International Law and Practice. He also served from 1988 to 1994 as an elected member of AILA's Board of Governors. He is named in the 1990-2004 editions of Best Lawyers in America under category of Immigration Law. Mr. Paparelli received the President's Award at the June 2001 AILA Annual Conference for his contributions to the Association in liaison with the INS on the immigration consequences of mergers, acquisitions and other forms of entity restructuring. He is a graduate of the University of Michigan (B.A., 1971) and Wayne State University Law School (J.D., 1976). He is the managing partner of Paparelli & Partners
LLP, http://www.entertheusa.com/, a firm in
Irvine, California that practices exclusively immigration and nationality law.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.